Standing Committee B

Thursday 16 May 2002

[Mr. Derek Conway in the Chair]

Clause 262

Provision of financial assistance forconsumer purposes

Question proposed, That the clause stand part of the Bill.

9.30 am

Mr. Nigel Waterson (Eastbourne): I ask the Under-Secretary for a little clarification. The Conservatives are the true champions of the consumer; indeed, I had a walk-on part in the fair trading legislation of the 1970s. We are clearly in favour of financial assistance being provided to consumers. I merely probe to discover what sort of ambit the clause will have. Advice and information, education materials and so on are extremely welcome. I assume that the clause seeks to exclude provision for the running of existing consumer bodies; and I assume, because of the way in which it is worded, that it also excludes providing financial support to consumer bodies that are taking super complaints or other legal action, whether under the Bill or other legislation. It would help if the Under-Secretary sketched out, with some concrete examples, what she has in mind.

Mr. Jonathan Djanogly (Huntingdon): I back what my hon. Friend had to say. The clause provides that ''any person'' can be in receipt of funding from the Secretary of State. That needs clarification. It is fair to say that people may be concerned not only about the scope of the provision and who will be funded but about how the funding will work. How much influence and patronage will the Government give to those organisations? Will the Under-Secretary say whether such provisions are normal? I say that in an open way; I do not know whether it is a normal situation.

The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): We intend to use the clause to finance projects from a new consumer grants fund. I must tell the hon. Member for Eastbourne (Mr. Waterson) that we do not intend to use it for legal aid or funding other legal activities. We are particularly keen to use the fund for projects in instances when consumers have suffered harm but when it is not possible for individual consumers to be identified or to seek redress. In such cases, the fund could effectively be an indirect form of redress for consumers. However, we will consider the merits of other projects and activities that might also benefit consumers.

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I have an illustrative but non-exhaustive list of activities that could be funded. They include promoting public knowledge, understanding consumer rights, promoting higher standards, providing information and advice, encouraging business, practical child and home accident prevention work, projects to benefit socially or economically vulnerable consumers and so forth.

Mr. Waterson: Is it intended to channel at least some of those activities through trading standards departments? Will she assure the Committee that if there is any conflict between the funding of the routine work of trading standards departments and of the work that she describes, the core work of those departments should take priority?

Miss Johnson: We see this as specific, project-related finance, not as mainstream finance. Trading standards departments may well receive some of these moneys in the fullness of time, and they are already doing projects on such extra funding.

In a case from the 1980s, involving Rover and the Consumers Association, it was discovered that Rover was using anti-competitive practices. By the time that that emerged, however, it was no longer possible to identify the consumers who had lost out. Rather than undergo an investigation, Rover admitted what it had done, and donated £750,000 to the Consumers Association to establish a self-financing information service for car buyers in the UK, and £250,000 to the Research Institute for Consumer Affairs to help fund its ability car programme of research, information and action on goods and services for disabled motorists. That is an indication of what could be done in the context of market-related competition fines.

We are making the money in the clause available in addition to our continuing commitment to fund the promotion of consumers' interests by bodies such as the National Consumer Council. We are, therefore, talking about an extra, project-related fund, as I explained.

Question put and agreed to.

Clause 262 ordered to stand part of the Bill.

Clauses 263 and 264 ordered to stand part of the Bill.

Schedule 24 agreed to.

Clause 265

Power to make consequential amendments etc.

Mr. Waterson: I beg to move amendment No. 143, in page 180, line 34, at end insert

'(1A) But no order made under subsection (1) may amend or alter or in any way affect Part 6'.

This debate echoes one that we had couple of times on part 6, which dealt with cartels. The clause gives the Secretary of State pretty wide powers to amend the Bill and other legislation by regulation. The Committee can take as read the usual outrage of Opposition

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parties over the inclusion of such powers; our outrage is almost as routine as the inclusion of the powers themselves.

There should, however, be no way of amending the provisions of part 6, in particular. As we said when we debated that part of the Bill, it provides for serious penalties and powers to deal with the perceived problem of cartels. We debated the criminalising of cartels, and there is no need to go over that ground again, save to say that importing severe criminal penalties and pretty draconian measures of investigation into the law may be counterproductive and not strictly necessary. Such provisions may hamper investigations and affect co-operation with other regimes, such as that in Europe. We have, however, been into all that.

The powers in part 6 are important and serious, and the amendment makes it clear that the Secretary of State would have to put primary legislation through the House if she wanted to alter them or make them even more draconian. I commend that perfectly sensible safeguard to the Committee.

Miss Johnson: As the hon. Gentleman said, the amendment would exclude the application of a power to make supplementary, incidental or consequential provisions by order. It would exclude the application of such a power to part 6, which provides for the new cartels offence.

The purpose of the clause is to provide the flexibility to make, by delegated legislation, any minor revisions to legislation that are required to ensure that the Bill's provisions fit well with those of other legislation. I am told that such clauses are common.

In a Bill of such complexity that covers several policy areas, the provision is entirely sensible. The powers are limited. They can be used only for the limited purposes given in subsection (1), which specifies that supplementary, incidental or consequential provision can be made only for the purposes of the Bill and in consequence of or to give effect to its terms. I emphasise that the powers would not permit the wholesale rewriting of substantive parts of the Bill, including part 6. Therefore, it would not be possible to make substantive changes to the cartels offence, for example, as a result of the provision.

We do not intend to change the Bill through the powers, and part 6 is no exception. However, it would be unwise to assume that any provision made under the powers could have no effect on part 6. It would be unwise to exclude that part from the clause, so I ask that the amendment be withdrawn.

Mr. Waterson: I am content, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 265 ordered to stand part of the Bill.

Clause 266 ordered to stand part of the Bill.

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Schedule 25

Minor and consequential amendments

Amendment made: No. 362, in page 298, line 20, at end insert

'Superannuation Act 1972 (c.11)

2A (1) The Superannuation Act 1972 is amended as follows

(2) In Schedule 1 (kinds of employment in relation to which pension schemes may be made), in the list of ''Other Bodies'', there is inserted at the appropriate place

The Chairman: With this it will be convenient to take Government amendments Nos. 597 to 617.

Miss Johnson: These consequential amendments and repeals flow from the main changes to the mergers and monopolies regimes. I set out the nature and purpose of the amendments in my letter to the Committee of 15 May, which was copied to you as Chairman, Mr. Conway. They are not controversial in any sense, so I hope that the Committee will accept them.

Mr. Waterson: I predicted from the outset of the Bill that there would be a raft of Government amendments at the last minute, and here they are. We have not had time to consider them all in detail. For the present purposes, I accept the Under-Secretary's assurance that they are technical and minor and, on that basis, we will not oppose them.

Amendment agreed to.

Amendments made: No. 597, in page 298, line 30, after '(1)' insert

'(a)'.

No. 598, in page 298, line 31, at end insert

'(b) for ''Parts IV, V, VI'' there is substituted ''Part 5'';

(c) the words ''or under the Competition Act 1980'' shall cease to have effect.'.

No. 599, in page 304, line 13, at end insert

'Competition Act 1980 (c. 21)

6A (1) The Competition Act 1980 is amended as follows

(2) In section 11 (references of public bodies and certain other persons to the Commission)

(a) in subsection (1)

(i) at the end of paragraph (a) there is inserted ''or'';

(ii) paragraph (c) and the word ''or'' before it shall cease to have effect;

(iii) for ''paragraph (a), (b) or (c)'' there is substituted ''paragraph (a) or (b)'';

(b) subsections (2), (9) and (9A) shall cease to have effect.

(3) After section 11 there is inserted

''11A References under section 11: time-limits

(1) Every reference under section 11 above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.

(2) A report of the Commission on a reference under section 11 above shall not have effect (and no action shall be taken in relation to it under section 12 below) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Secretary of State under subsection (3) below.

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(3) The Secretary of State may, if he has received representations on the subject from the Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than three months.

(4) No more than one extension is possible under subsection (3) above in relation to the same reference.

(5) The Secretary of State shall publish any extension made by him under subsection (3) above in such manner as he considers most suitable for bringing it to the attention of persons who in his opinion would be affected by it or be likely to have an interest in it.

11B References under section 11:powers of investigation and penalties

(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3) below, for the purposes of references under section 11 above as they apply for the purposes of references under that Part

(a) section 105 (attendance of witnesses and production of documents);

(b) section 106 (enforcement of powers under section 105 general);

(c) section 107 (penalties);

(d) section 108 (penalties: main procedural requirements);

(e) section 109 (payments and interest by instalments);

(f) section 110 (appeals);

(g) section 111 (recovery of penalties); and

(h) section 112 (statement of policy).

(2) Section 106 shall, in its application by virtue of subsection (1) above, have effect as if

(a) subsection (2) were omitted;

(b) in subsection (4), for the word ''publication'' there were substituted ''laying before both Houses of Parliament''; and

(c) in subsection (9) the words from ''or section'' to ''section 63(3))'' were omitted.

(3) Section 107(5)(b)(ii) shall, in its application by virtue of subsection (1) above, have effect as if for the words from ''the latest'' to the end there were substituted ''the day on which the report of the Commission on the reference concerned has been laid before both Houses of Parliament''.

11C References under section 11:further supplementary provisions

(1) Section 113 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions under this Act as it applies in relation to functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words ''the OFT'' were omitted.

(2) Section 117 of the Enterprise Act 2002 (offences by bodies corporate) shall apply for the purposes of this Act as it applies for the purposes of Part 3 of that Act.

(3) For the purposes of section 12 below, a conclusion contained in a report of the Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.

11D Interim orders

(1) Subsection (2) below applies where, in the circumstances specified in subsection (1) of section 12 below, the Secretary of State has under consideration the making of an order under subsection (5) of that section.

(2) The Secretary of State may by order, for the purpose of preventing pre-emptive action

(a) prohibit or restrict the doing of things which the Secretary of State considers would constitute pre-emptive action;

(b) impose on any person concerned obligations as to the carrying on of any activities or the safeguarding of any assets;

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(c) provide for the carrying on of any activities or the safeguarding of any assets either by the appointment of a person to conduct or supervise the conduct of any activities (on such terms and with such powers as may be specified or described in the order) or in any other manner;

(d) do anything which may be done by virtue of paragraph 20 of Schedule 7 to the Enterprise Act 2002 (information powers).

(3) An order under this section shall come into force at such time as is determined by or under the order.

(4) An order under this section shall, if it has not previously ceased to be in force, cease to be in force on the making of the order under section 12(5) below or (as the case may be) on the making of the decision not to make such an order.

(5) The Secretary of State shall publish any decision made by him not to make an order under section 12(5) below in such manner as he considers most suitable for bringing it to the attention of persons who in his opinion would be affected by it or be likely to have an interest in it.

(6) The Secretary of State shall, as soon as reasonably practicable, consider any representations received by him in relation to varying or revoking an order under this section.

(7) The following provisions of Part 3 of the Enterprise Act 2002 shall apply in relation to orders under this section as they apply in relation to orders under paragraph 2 of Schedule 6 to that Act

(a) section 82(2) and (3) (enforcement orders: general provisions);

(b) section 83 (delegated power of directions); and

(c) section 90(1) to (5), (8) and (9) (rights to enforce orders).

(8) In this section ''pre-emptive action'' means action which might impede the making of an order under section 12(5) below.''.

(4) In section 12 (orders following report under section 11)

(a) in subsection (5) for the words from ''by order'' to the end there is substituted ''make an order under this subsection'';

(b) after subsection (5) there is inserted

''(5A) An order under subsection (5) above may contain anything permitted by Schedule 7 to the Enterprise Act 2002, except paragraphs 8, 14 and 15 of that Schedule.

(5B) An order under subsection (5) above shall come into force at such time as is determined by or under the order.'';

(c) for subsection (6) there is substituted

''(6) The following provisions of Part 3 of the Enterprise Act 2002 shall apply in relation to orders under subsection (5) above as they apply in relation to orders under paragraph 11 of Schedule 6 to that Act

(a) section 82(2) and (3) (enforcement orders: general provisions);

(b) section 83 (delegated power of directions);

(c) section 84 (contents of certain enforcement orders);

(d) section 90(1) to (5), (8) and (9) (rights to enforce orders); and

(e) Schedule 9 (procedural requirements for orders).

(7) The Secretary of State shall publish any decision made by him to dispense with the requirements of Schedule 9 to the Enterprise Act 2002 as applied by subsection (6) above; and shall do so in such manner as he considers most suitable for bringing the decision to the attention of persons who in his opinion would be affected by it or be likely to have an interest in it.''

(5) In section 16 (general provision as to reports)

(a) subsection (1) shall cease to have effect;

(b) in subsection (2) the words ''or of the Director'' shall cease to have effect.

(6) In section 17 (laying before Parliament and publication of reports), in subsections (1), (3), (4) and (5), the words ''or 13(5)'' shall cease to have effect.

(7) Sections 18 (information and advice about operation of Act), 21 (monopoly references by Secretary of State alone) and 24 (modification of provisions about performance of Commission's functions) shall cease to have effect.

(8) In section 31 (orders and regulations)

(a) in subsection (1) the words ''or regulations'' shall cease to have effect;

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(b) in subsection (3)

(i) the words ''regulations under this Act or'' shall cease to have effect;

(ii) after ''11(4)'' there is inserted '', 11D'';

(iii) after ''above'' there is inserted '', or section 107(4) or (6) of the Enterprise Act 2002 as applied by section 11B(1)(c) above,'';

(c) subsection (4) shall cease to have effect;

(d) after subsection (4) there is inserted

''(5) Any power of the Secretary of State to make an order under this Act

(a) may be exercised so as to make different provision for different cases or different purposes; and

(b) includes power to make such incidental, supplementary, consequential, transitory, transitional or saving provision as the Secretary of State considers appropriate.''

(9) In section 33 (interpretation), for subsection (2) there is substituted

''(2) Unless the context otherwise requires, in this Act ''Minister'' includes a government department and the following expressions shall have the same meanings as they have in Part 3 of the Enterprise Act 2002

''business''

''the Commission''

''enactment''

''goods''

''services''

''supply (in relation to the supply of goods)''

''the supply of services''.'''

No. 388, in page 305, line 5, after '(6)' insert '

(i)'.

No. 389, in page 305, line 6, at end insert

'(ii) for ''sections 55 and 56 of that Act (disclosure)'' there is substituted ''Part 9 of the Enterprise Act 2002 (Information)''.'.

No. 390, in page 313, line 18, after '(9A)' insert '

'(a)'.

No. 391, in page 313, line 19, at end insert

'(b) for ''sections 55 and 56 of that Act (disclosure)'' there is substituted ''Part 9 of the Enterprise Act 2002 (Information)''.'.

No. 600, in page 314, line 40, at end insert

'(3A) In section 66 (amendments of the Fair Trading Act 1973)

(a) for subsection (3) there is substituted

''(3) For the purposes of Part 3 of the Enterprise Act 2002 (merger references), where a person enters into a franchise agreement as a franchisee, there shall be taken to be brought under his control an enterprise engaged in the supply of the railway services to which the agreement relates.'';

(b) for subsection (6) there is substituted

''(6) Expressions used in subsection (3) above and in Part 3 of the Enterprise Act 2002 have the same meaning in that subsection as they have in that Part.'''.

No. 392, in page 315, line 20, after '(6A)' insert '

(i)'.

No. 393, in page 315, line 21, at end insert

'(ii) for ''sections 55 and 56 of that Act (disclosure)'' there is substituted ''Part 9 of the Enterprise Act 2002 (Information)''.'.

No. 601, in page 319, line 24, at end insert

'(33A) In section 45 (the Competition Commission), after subsection (7) there is inserted

''(8) The Secretary of State may by order make such modifications in Part 2 of Schedule 7 and in Schedule 7A (performance of the Competition Commission's general functions) as he considers appropriate for improving the performance by the Competition Commission of its functions.''.'

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No. 602, in page 320, line 2, at end insert

'(e) in subsection (8), for ''Director'' there is substituted ''OFT''.'.

No. 394, in page 320, leave out lines 7 to 20.

No. 603, in page 321, line 10, after 'investigation),' insert

'in subsection (1), for ''Director'' there is substituted ''OFT'', and'.

No. 604, in page 321, line 21, at end insert

'(47A) In section 71 (regulations, orders and rules), in subsection (4), after paragraph (c) there is inserted

''(ca) section 45(8),''.'.

No. 605, in page 321, line 22, after 'concentrations)' insert '

'(a) in paragraph 1

(i) in sub-paragraph (1), for the words from ''Part V'' to ''1973 Act'')'' there is substituted ''Part 3 of the Enterprise Act 2002 (''the 2002 Act'')'';

(ii) in sub-paragraph (4), for ''Section 65 of the 1973 Act'' there is substituted ''Section 24 of the 2002 Act'';

(b) in paragraph 2

(i) in sub-paragraph (1)(a), for ''Part V of the 1973 Act'' there is substituted ''Part 3 of the 2002 Act'';

(ii) in sub-paragraph (2), for ''Section 65 of the 1973 Act'' there is substituted ''Section 24 of the 2002 Act'';'.

No. 606, in page 321, line 27, at end insert

'(d) in paragraph 5, for paragraphs (a) to (d) there is substituted

''(a) the OFT or (as the case may be) the Secretary of State has published its or his decision not to make a reference to the Competition Commission under section 20, 31, 43 or 60 of the 2002 Act in connection with the agreement;

(b) the OFT or (as the case may be) the Secretary of State has made a reference to the Competition Commission under sections 20, 31, 43 or 60 of the 2002 Act in connection with the agreement and the Commission has found that the agreement has given rise to, or would if carried out give rise to, a relevant merger situation or (as the case may be) a special merger situation;

(c) the agreement does not fall within paragraph (a) or (b) but has given rise to, or would if carried out give rise to, enterprises to which it relates being regarded under section 24 of the 2002 Act as ceasing to be distinct enterprises (otherwise than as the result of subsection (3) or (4)(b) of that section);

(d) the OFT has made a reference to the Competition Commission under section 32 of the Water Industry Act 1991 in connection with the agreement and the Commission has found that the agreement has given rise to, or would if carried out give rise to, a merger of any two or more water enterprises; or

(e) the Secretary of State has made a reference to the Competition Commission under Part 3 of the 2002 Act as applied by virtue of paragraph 1 of Schedule 5 to that Act (application of Part 3 to water mergers) in connection with the agreement and the Commission has found that the agreement has given rise to, or would if carried out give rise to, a merger of any two or more water enterprises.'''.

No. 395, in page 325, line 11, after '(11)' insert '

'(i)'.

No. 396, in page 325, line 12, at end insert

'(ii) for ''sections 55 and 56 of that Act (disclosure)'' there is substituted ''Part 9 of the Enterprise Act 2002 (Information)''.'.[Miss Melanie Johnson.]